New Legislation Protects Trade Secrets

The continued success of our industry and continued American leadership in semiconductor design and manufacturing depends on strong protections for trade secrets and other IP.

Protection of trade secrets in the U.S. semiconductor industry and across many other sectors is about to get stronger, thanks to the Defend Trade Secrets Act, bipartisan legislation recently passed by Congress and signed into law by President Obama. Enactment of this much-needed legislation marks an important step forward in the effort to protect the semiconductor industry’s valuable intellectual property (IP).  

Trade secrets are the “secret sauce” of innovation in the semiconductor industry and throughout our economy, enabling technological breakthroughs that have made America the source of myriad life-changing products. In the semiconductor industry, trade secrets include essential IP such as manufacturing processes and techniques, circuit designs, software source code, and business strategies and customer lists. This IP has helped make the semiconductor sector America’s most innovative manufacturing industry and has helped enable the industry to employ nearly 250,000 workers in the United States and support jobs for over 1 million more.
U.S. semiconductor companies devote about one-fifth of sales revenue to R&D—more than any other industry in the United States. These investments often lead to the creation of trade secrets and other intellectual property, the lifeblood of our industry. The continued success of our industry and continued American leadership in semiconductor design and manufacturing depends on strong protections for trade secrets and other IP.
Under current law, there are limited legal remedies for the theft or misuse of trade secrets. Federal law currently provides criminal penalties for trade secret misappropriation, but owners of trade secrets have lacked a federal civil remedy for the theft of their trade secrets. State laws provide a civil remedy, but the state courts lack the authority to act effectively against trade secret theft that crosses state and national borders.
The Defend Trade Secrets Act empowers U.S. companies to protect their trade secrets in federal court, which is particularly relevant in today’s world, where trade secret theft is often conducted across state or even national borders. The legislation provides a consistent, harmonized legal framework and helps avoid the commercial injury, diminished competitiveness, and loss of employment that can occur when trade secrets are stolen.
Congressional approval of this much-needed legislation was a team effort. The bill’s lead sponsors, Sen. Orrin Hatch (R-Utah), Sen. Chris Coons (D-Del.), Rep. Doug Collins (R-Ga.), and Rep. Jerrold Nadler (D-N.Y.), introduced the bill and helped shepherd it through the legislative process. The co-chairs of the Congressional Semiconductor Caucus also strongly supported the legislation and urged their colleagues to do the same. And President Obama served as a strong advocate and signed the legislation into law on May 11.
Thanks to their collective efforts, the Defend Trade Secrets Act will help protect valuable intellectual property, strengthen the semiconductor industry, and promote economic growth and innovation throughout the U.S. economy.

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